©Health & Fitness Journal. FILE PHOTO: A screen shows the logo and trading information for Coty Inc on the New York Stock Exchange (NYSE) in New York, U.S. November 18, 2019. REUTERS/Brendan McDermid/File Photo
By Ananya Mariam Rajesh
(Health & Fitness Journal) – Coty (NYSE:) Inc topped Wall Street estimates for quarterly sales on Tuesday, as higher prices and resilient demand for its fragrances and cosmetics helped offset the impact of a strong U.S. dollar and the company’s pullback cushion Russia.
Post-lockdown consumers who are more on-the-go are splurging on smaller luxuries like makeup and perfumes, even as they put off major purchases because of rising inflation and recession risks.
Coty’s prestige division, home to Calvin Klein and Gucci cosmetics and fragrances, saw sales fall 1% on macroeconomic concerns. But chief executive officer Sue Nabi told Health & Fitness Journal that the company sees “no slowdown or decline in trade in the prestige division.”
In fact, consumers are shifting from lower-priced beauty labels to the prestige space, she said.
Perfume maker Hugo Boss is also set to continue raising prices in the mid-single digits around the winter as it battles higher freight and labor costs.
The beauty category is “more resilient than ever,” Nabi said after Coty reiterated its annual earnings forecast.
European competitor L’Oreal had also reported strong third-quarter sales growth as robust demand in Europe and the United States offset disruptions caused by China’s strict lockdowns.
China’s zero-COVID policy also impacted Estee Lauder (NYSE:), prompting the company to slash full-year guidance, but Coty’s reduced exposure to the Chinese market has helped CoverGirl’s parent company shield itself.
According to Refinitiv’s IBES data, net sales rose 1% to $1.39 billion for the first quarter ended September 30, compared to analyst estimates of $1.37 billion.
Net income increased to $125.3 million, or 15 cents a share, from $103 million, or 13 cents a share, in the prior year.